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Technology Stocks : PCW - Pacific Century CyberWorks Limited

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To: ms.smartest.person who wrote (627)	3/22/2001 6:14:47 PM
From: ms.smartest.person	Read Replies (1) of 2248

Rejigged SingTel bid on cards as Optus sweetener By Kevin Morrison Singapore Telecommunications is understood to be looking at raising the cash element of its takeover offer for Cable & Wireless Optus to appease its 52.5 per cent shareholder, Britain's Cable & Wireless. SingTel's original bid, which valued Optus at $4.50 a share, was based on $2.25 cash and 0.8 SingTel shares for each Optus share. SingTel shares were trading around $S2.39 yesterday Sources said SingTel was trying to be more flexible with its offer but was still looking to sign a deal before Vodafone Pacific lodged its conditional takeover offer with Optus early next week. SingTel has about $7 billion in cash reserves but most of this will be used up if it succeeds in buying Optus for about $17 billion. Fund managers said SingTel should have no problems raising debt to fund a higher cash component of its offer, which at present is about $8.5 billion. Of this, Cable & Wireless would take $4.45 billion. Cable & Wireless has been under pressure from its shareholders to exit Optus cleanly and to not repeat the mistake last year of taking a large parcel of Pacific Century CyberWorks shares for its 54 per cent stake in Hong Kong Telecom. PCCW's plunging share price has cut the value of this stake substantially. Cable & Wireless still owns 15 per cent of PCCW shares, with its share price down 90 per cent since it outbid SingTel for Hong Kong Telecom a year ago. Fund managers said Cable & Wireless could find that if it accepted the SingTel offer, which would give it about 10 per cent of SingTel's shares, it could see the value of its SingTel holding fall, since the Singapore carrier's shares are seen as overvalued, compared with other carriers. SingTel had threatened to walk away from its offer on Monday if there was no decision by Cable & Wireless. The two parties agreed to continue talking but SingTel is still threatening to walk if it does not get an answer before early next week. Optus shares rose 8c to $3.98, partly reversing this week's losses as investors feared that SingTel would abandon the bid. "The fact that they are still talking is positive," one industry source said. Vodafone has argued in its submission to the Australian Competition and Consumer Commission that SingTel's strategy to keep Optus as a full service provider is flawed since it will not have the funds to support all of the capital demands of the Optus mobile, data and consumer networks. smh.com.au

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